Civil Servants’ Pension Cuts Halted, But ‘Category One Military and Public Servants’ Still Facing Deductions: Li Lai-hsi Reveals Monthly Loss of NT$20,000

Last year, Taiwan’s Legislative Yuan passed amendments to halt pension cuts for civil servants, officially stopping the annual reduction of pension replacement rates and standardizing calculations based on 2023 levels. This change is expected to reassess retirement benefits for approximately 180,000 retired civil servants across Taiwan. However, this policy fails to resolve the struggles of all retirees. On the 16th, Li Lai-hsi, former chairman of the National Civil Servants Association, took to Facebook to speak out on behalf of retired military personnel, questioning why the government continues to reduce pensions for veterans under the old pension system despite soaring budgets and consecutive years of tax revenue exceeding forecasts.

Why Are Civil Servants Exempt While Retired Military Personnel Are Not?

Li revealed that yesterday, a retired veteran named Mr. Liao, who was helping him with weeding, immediately asked: “Civil servants’ pensions are no longer being cut—why are military retirees still being reduced?” This reflects a widespread confusion among many retired veterans.

Li explained that Mr. Liao retired at age 38 and has now completed 30 years of service under the pure old system, known as the “granted pension” (en-gei) system. His pension is funded directly from the annual government budget and is unrelated to the retirement fund. Mr. Liao argues that the potential insolvency of the retirement fund has no bearing on retirees under the pure old system.

Pension Replacement Rate Drops from 82% to 60%: Old-System Retirees Face Monthly Loss of NT$20,000

According to Mr. Liao, his pension was originally calculated at an 82% replacement rate. If current policies continue, this rate is projected to drop to just 60% by Minguo 119 (2030), equivalent to a monthly reduction of over NT$20,000.

Li pointed out that during the pension reform, the government repeatedly claimed the retirement fund was nearing bankruptcy. However, for retirees under the “granted pension” system, their pensions are not funded by the retirement fund at all, so the bankruptcy argument holds no validity and fails to convince affected veterans.

Is National Finances in Crisis or Prosperous? Rising Tax Revenues Spark Doubts

In response to the government’s claim of fiscal hardship, Li presented data to challenge this narrative. He noted that the government’s total budget has surged from NT$1.9 trillion before reform to NT$3.1 trillion today. When special budgets are included, the scale becomes even larger. Moreover, income tax, business tax, and securities transaction tax have consistently exceeded targets, with tax revenue in the first half of this year already surpassing NT$2.5 trillion.

Li questioned why, with abundant tax revenues and no connection between the retirement fund and old-system veterans, the government continues to cut their pensions. He demanded a clear explanation on where the deducted funds are being redirected.